Impossible, you say?  Well, once you factor in the expenses associated with working, especially if you’re paying a significant portion of your income towards childcare, you might discover that you can afford to cut back your working hours- - even if only for a short period of time.  Filling out the following worksheet should help you make sense (and cents!) of the dollars involved.  Who knows…the results may just surprise you!

STEP ONE – Calculate the effects of a reduction of hours on income.

Going part-time will involve a reduction in income, typically prorated according to the total number of hours you work.  Therefore, if you decide to work a 3/5 schedule your salary will be reduced by forty percent (i.e., if you presently earn $50,000 and decide to work three days a week, your new salary will be $30,000).  Be aware that your employer may also prorate (or even eliminate) your compensation for time off due to vacation, personal, sick days, holidays, etc., so factor that into your financial planning as well.  

My projected total income when I go part-time is ____________________.

STEP TWO – Calculate the costs of benefits replacement

Some companies reduce or eliminate benefits for part-time employees.  If you wish to continue these benefits you may need to increase your contributions to the company’s plan or go to an outside provider to secure private coverage.  

The cost to replace my benefits is ____________________

 STEP THREE – Calculate the savings created by a reduction in work hours

Here comes the fun part - - figuring out how much you can save by working less!  How much of a reduction depends on a number of factors including how willing you are to exchange certain luxuries, like having a cleaning lady or eating out three times a week, in order to reduce your expenses.  Be wary of slashing childcare expenses until you have a real handle on exactly how much coverage you’ll need to maintain without having to constantly juggle makeshift arrangements.  Remember, the objective is to simplify your life, not make it more complicated by completely eliminating your support system! 

*  For two career couples, the second income is taxed on top of your spouse’s income, resulting in a higher proportion of your total income being taxed.  This can significantly impact the value of the second income.

 My projected work related expenses are______________________

STEP FOUR- Add it up!

My projected total income when I go part-time ____________________

MINUS

The cost to replace my benefits __________________

MINUS 

My projected work related expenses ______________________

EQUALS

Net Part-Time Income after expenses   _____________________

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